• Speaking at the Santander annual conference earlier, BCB President Campos Neto acknowledged the improvement in mid-month inflation, but added that it is still causing discomfort for policymakers. He also said that there were early but clearer signs that there may be transmission to service prices from a strong labour market, reiterating that the central bank will do what it needs to do to bring inflation to target.
  • Meanwhile, he noted that inflation expectations have gone through additional unanchoring recently and that breakevens have risen a lot, also causing discomfort.
  • Campos Neto reiterated that the asymmetry of risks on inflation does not mean guidance and that he prefers not to give guidance to have flexibility for future decisions. However, he acknowledged that this approach of not giving guidance has increased volatility in markets.

BRAZIL: BCB’s Campos Neto Notes Additional Unanchoring Of Inflation Expectations

Last updated at:Aug-28 14:27By: Keith Gyles
  • Speaking at the Santander annual conference earlier, BCB President Campos Neto acknowledged the improvement in mid-month inflation, but added that it is still causing discomfort for policymakers. He also said that there were early but clearer signs that there may be transmission to service prices from a strong labour market, reiterating that the central bank will do what it needs to do to bring inflation to target.
  • Meanwhile, he noted that inflation expectations have gone through additional unanchoring recently and that breakevens have risen a lot, also causing discomfort.
  • Campos Neto reiterated that the asymmetry of risks on inflation does not mean guidance and that he prefers not to give guidance to have flexibility for future decisions. However, he acknowledged that this approach of not giving guidance has increased volatility in markets.

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